Building work put in place

Res construction rises for the first time in two years

5 Jun 2025

Matthew Allman

Our take on the latest Building work put in place (Thu 5 Jun 2025)

Residential volumes up 2.6% from Dec 2024 (sa)

Non-residential volumes down 3.9% from Dec 2024 (sa)

Total activity down 12% from March 2024

The key numbers...

The volume of total building work put in place was unchanged in the March 2025 quarter from December 2024, following six consecutive quarterly declines. Lower non-residential activity (down 3.9%) was offset by a 2.6% rise in residential activity (all figures seasonally adjusted).
Total building activity in the March quarter was 12% lower than a year earlier, declining for the seventh consecutive quarter in real terms. The annual decline was smaller than the 16% fall in the previous quarter, but it is still the second largest drop since September 2011 (excluding the lockdown-affected June 2020 quarter).
Residential activity rose from the previous quarter for the first time in over two years, but despite the 2.6% lift, work put in place volumes in the March quarter were 25% below the peak in September 2023 (seasonally adjusted). The annual decline in residential activity narrowed to 12%pa, the smallest annual fall since March 2024.
Non-residential activity declines accelerated as expected, as this build type tends to lag the economic cycle. The annual decline of 12%pa was the largest since December 2011 (excluding the June 2020 quarter). Annual growth in non-residential activity has been negative for a full year, for the first time since 2020.

Decline in residential activity moderates

Annual % changes in building work put in place volumes

...and our reaction

Residential activity was stronger than expected in the March quarter, with activity 2.2% above our forecast. It was positive to see the first quarterly rise in residential activity since September 2022. Part of the overperformance in March could be due to timing, with a 3.2% downward revision to new dwelling activity in December 2024 pushing more work into the March quarter.
New dwelling activity was weaker than expected, 1.3% below forecast, recording the lowest quarterly value of activity in four years. Residential additions and alterations (A&A) work continued to moderate, but was the main driver of the overperformance, $150m higher than expected. Quarterly residential A&A work was at its lowest in two years, but it remained a larger proportion (14%) of total residential activity than during the new construction boom in 2022 (12%).
Non-residential activity also overperformed, with activity 5.9% above forecast. Overperformance was driven largely by social building ($150m higher than expected), and factories and education building were also $42m and $37m higher than expected respectively. In contrast, storage buildings were $94m lower than expected.
All broad regions saw an annual decline in residential activity, led by Wellington (-31%pa). Non-residential weakness was widespread but uneven, with annual declines occurring across the broad regions except for Canterbury (up 6.1%pa). There was less than $1.0b of non-residential activity in Auckland (down 22%pa) for the first time since the March 2022 quarter. The second-largest decline was in the South Island (excluding Canterbury), which was down 9.5%pa. Waikato (-4.4%pa), Wellington (-2.7%pa), and the Rest of the North Island (-1.0%pa) saw more muted declines.

Latest updates

Premium

Building work put in place

Res construction rises for the first time in two years

The key numbers...

Decline in residential activity moderates

...and our reaction

Latest updates

Non-residential work hammered as residential softens further

Non-residential activity continues to decline

Lower residential activity leads construction decline